Tuesday, May 26, 2009

Balance of power in China

The Financial Times reports this morning that both Android and the iPhone are expected to officially arrive in China Real Soon Now:

Google’s Android mobile phone operating system is set to make its legal debut in China in June when China Mobile launches specially adapted handsets.

The Taiwan-based handset manufacturer HTC said China Mobile would start selling a customised version of the HTC Magic, a handset based on Google’s Android operating system, through its stores.

Analysts believe that a successful launch of a high-end handset for China Mobile subscribers could help remove hurdles to the entry of similar handsets such as Apple’s iPhone into the country, the world’s largest mobile market.

Apple has negotiated for months with China Unicom, China Mobile’s smaller rival, to introduce the iPhone to China, but industry executives say regulators have sought to hold back an agreement until China Mobile has a device that will allow it to compete for 3G customers.
Of course, as the FT reports, grey market Android and iPhone models are available in China already.

The FT notes that the three major carriers — China Mobile, China Unicom and China Telecom — are being played against each other to maximize competition. It makes sense that the government wants China Mobile to go first: it is the world’s largest mobile phone carrier, but forced to deploy China’s home-grown (and China-only) TD-SCDMA technology.

The timing seems right for both the Magic and iPhone. The HTC Magic was released by Vodafone in Europe earlier this month. It is coming to the US (in June?) as the T-Mobile myTouch 3G. It’s also coming to Japan and Canada. In Japan, the Magic (there the HT-03A) would be sold by NTT DoCoMo, which already sells two other smartphone platforms — MOAP-S (Symbian) and MOAP-L (Linux). The Canada intro is via Rogers Wireless, which is also rumored to be selling the iPhone this summer.

Meanwhile, China Unicom’s iPhone launch is conditioned on the availability of the iPhone 3.0 model(s) next month. (Presumably if Apple releases more than one model, China will pick the more affordable one). Pundits argue whether the iPhone will or won’t be announced at WWDC in 13 days. I lean towards the “will announce” camp, because Apple needs to show developers the new device and demonstrate its features. Educating developers is the whole point of WWDC, and this year’s WWDC is more iPhone centric than ever.

China Unicom is also getting an Alcatel-branded Windows Mobile 6.1 handset next month.

The laggard appears to be China Telecom. I haven’t seen any reports of a 3G smartphone for its rapidly deploying cdma2000 network, which it got from China Unicom last year in the grand reorganization orchestrated by the Ministry of Industry and Information that is enabling the huge 3G rollout by all three operators. Thus far, China Unicom has denied persistent rumors of its own BlackBerry. Its main foreign handset suppliers are Samsung and LG, which sell Windows Mobile and Symbian handsets. (I’m guessing the first Symbian CDMA handset will come from Samsung or one of the Chinese makers early next year).

The only other major CDMA smartphone handset vendor — Palm — is introducing the Pre in the US June 6, but the only overseas plans I’ve seen are with Bell Mobility (Canada’s #2 carrier) and with Telefonica in the UK (O2), Spain and Latin America. Since there will not be enough Pre handsets to go around, there’s no rush on introducing the phone to the world’s largest market.

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